International Spirits & Wellness Holdings, Inc. (OTCMKTS:ISWH) is an interesting stock from a valuation and fundamental analysis standpoint. It’s something of a case study, and may represent a major error in market pricing based on an in-depth examination.
Consider the following: the company has now posted two consecutive quarters of gross profitability and is moving toward its third in a row this quarter according to all obvious available evidence. If it had cleared a single final transaction before October 1 of this year, it would have posted $225K in revenues in Q3 alone – which is an annualized sales pace of $900K. So its not like these guys aren’t doing “real” business. And they have three distinct lines of business, all of which will show strong organic growth this quarter.
In addition, they just signed a major partnership with a nationally-recognized brand development and manufacturing leader in the nano-infusion of CBD products, which is possibly the fastest growing major consumer market on the planet right now, and likely will be for several years to come.
This is well reflected in management commentary from the company’s CEO when its latest financial performance data was made public a few weeks ago:
“We continue to ride a wave of growth in 2019, with ramping sales, big strategic achievements, and what will clearly go down as our best year on record, with the bulk of the action still in front of us during the final seven weeks of the year,” commented Terry Williams, CEO of ISWH.
“Based on our visibility right now into current quarter operations, Q3 – strong as it was – is going to pale in comparison to Q4 because most of our topline growth in CBD and Spirits is going to be reflected in the current quarter. That said, Q3 represents another signpost in the course of the Company’s continuing resurgence, particularly for our Home Healthcare segment, and it’s another strong report card showing gross profitability and a big jump in overall sales.”
And yet, the stock is trading at just about the lowest prices possible for a publicly traded equity security. You might say, either that price is a terrible mistake by Mr. Market or the fundamental story is bologna.
To that, we would also note that the company has committed to releasing fully audited financials at the end of the year and plans on filing for an uplisting onto a higher tier of the OTC because it has produced audited financials in the past and has enough operational strength in the books at this point.
“It was a great quarter and reflects the scope of the momentum we have in place right now, but falls short of capturing the trajectory we have in front of us,” continued Mr. Williams. “We will be producing an audited version of these results as part of our move to uplist onto the OTCQB next year. And with the help of new partnership agreements and the powerful growth we already see across all segments, we believe Q4 will easily be the best quarter in the Company’s history.”
Hence, we return to the idea that the share price may be a major mistake by Mr. Market. Time will tell, but ISWH may be worth a close look for interested speculators.